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Nation & World

Obama urges short-term budget fix, but GOP balks at more revenue

President Barack Obama makes an announcement on sequestration in the White House Press Briefing Room on February 5, 2013. The President will ask Congress to come up with tens of billions of dollars in short-term spending cuts and tax revenue to put off the automatic across the board cuts that are scheduled to kick in March 1.
President Barack Obama makes an announcement on sequestration in the White House Press Briefing Room on February 5, 2013. The President will ask Congress to come up with tens of billions of dollars in short-term spending cuts and tax revenue to put off the automatic across the board cuts that are scheduled to kick in March 1.

(MCT) — WASHINGTON — President Barack Obama urged Congress on Tuesday to pass a package of modest cuts and tax changes as a way to delay drastic, across-the-board federal spending reductions that could harm the economy.

But Obama’s proposal would only postpone the $85 billion in automatic cuts, scheduled to take effect March 1, by a few months until a larger deal could be reached.

“Deep, indiscriminate cuts to things like education and training, energy and national security will cost us jobs, and it will slow down our recovery,” Obama said in a seven-minute statement to reporters at the White House. “It’s not the right thing to do for the economy. It’s not the right thing for folks who are out there still looking for work.”

Obama’s remarks came as the nonpartisan Congressional Budget Office released its forecast for the next decade

The CBO projects, absent changes in spending and/or taxes, that federal debt held by the public will reach levels akin to 76 percent of the total economy, the largest percentage since 1950. It would tick up to 77 percent by the end of the decade and rise even further in years beyond that.

Obama did not offer a specific proposal or release any new plans Tuesday. But he said Congress should approve additional revenue by eliminating tax loopholes and deductions benefiting certain industries or the wealthy, as well as spending reductions.

He also said Congress should rely on a proposal he made in mid-December to House Speaker John Boehner, R-Ohio, which includes, among other changes, a less-generous measure of inflation to Social Security and other programs and cuts to health care.

On Capitol Hill on Tuesday, Republicans began criticizing Obama’s comments even before he uttered them, dismissing them as more partisan rhetoric and the same mix of tax increases and defense cuts he advocated in the past. Senate Minority Leader Mitch McConnell, R-Ky., said the president had an “unserious attitude.”

“We must be clear. This approach is neither responsible nor balanced,” said a joint statement by House Armed Services Committee Chairman Howard “Buck” McKeon, R-Calif., and Sen. James Inhofe of Oklahoma, the top Republican on the Senate Armed Services Committee.

The automatic cuts — known inside the Beltway as sequestration — are the result of a bipartisan deal struck in 2011 to raise the nation’s debt ceiling. Congress agreed that if a 12-member committee failed to reduce the deficit by $1.2 trillion over the next decade, the cuts would come from government spending.

The first round of $109 billion in cuts was set to start in January. But the White House and Congress agreed to delay that until March 1 as part of a deal that raised taxes on the richest 1 percent of Americans. The bill, passed by the Senate and the House of Representatives on New Year’s Day, also lowered the cuts to $85 billion.

The reductions, nearly 10 percent of the nation’s defense and domestic spending, would be felt immediately in a wide range of government programs: fewer FBI agents, less food assistance for low-income families and a delay in new equipment and repairs for the military. The cuts could lead to the loss of hundreds of thousands of jobs.

In recent weeks, some Republican lawmakers suggested that the government should consider allowing the original cuts to go forward.

“We’re willing to let it go through till they (Democrats) respond to us,” said Rep. Lynn Westmoreland, R-Ga.

CBO director Douglas Elmendorf told reporters Tuesday that there are consequences for allowing fiscal problems to go unfixed.

Taking $2.34 trillion out of the 10-year projected deficit, he said, would only bring down the percentage of debt held by the public from 77 percent to 66 percent at the end of a decade. That’s still well above the historical average of 39 percent over the past 40 years.

“There are costs and risks of maintaining debt at that level,” the CBO chief said, adding that high debt levels leave the U.S. government with little room to maneuver if the economy were to slide back into recession or faced other shocks.

House Republicans insist that the nation faces a spending problem and that additional revenue is not part of the solution, even if it’s masked as closing loopholes or raising fees.

Higher taxes would be “nothing more than another tax hike to pay for more Washington spending,” said House Ways and Means Committee Chairman Dave Camp, R-Mich. “That is not what America needs.”

House Republicans want the White House to accept the alternative spending cuts the chamber passed twice last year. The partisan plan died in the Senate.

Meanwhile, the House Republicans pressed ahead with legislation that would require Obama to produce a balanced budget in 10 years.

“This president, it’s time for him to step up, put forward a balanced budget or tell us when his budget will balance,” said Rep. Tom Price, R-Ga., the bill’s chief sponsor.

Rep. Chris Van Hollen of Maryland, the top Democrat on the House Budget Committee, scoffed and said the bill was nothing more than a “meaningless political action.”

The House will spend much of its week debating the bill — and likely vilifying Obama for not proposing a budget by his deadline Monday. Administration officials attribute the delay to the New Year’s Day agreement.


(Staff writer Kevin G. Hall contributed to this report.)

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